join in a microfinance system operating on the basis of individual liability credit contract, or on the basis of joint … liability loan contract through forming self-help group or may not participate in any type of microfinance system. This paper … individual liability loan contract, comparatively less wealthy prefers to join microfinance system operating on the basis of …

and banks are subject to moral hazard and monitoring is essential. Multiple-bank lending is optimal whenever the benefit … of greater diversification in terms of higher monitoring dominates the costs of free-riding and duplication of efforts … less profitable, and poor financial integration, regulation and inefficient judicial systems increase monitoring costs …